Business 2.0 thinks Sony’s PSP will be a big hit.

The buzz on Sony’s upcoming hand-held video game system, the PSP, is building every day as E3 inches closer promising the first look at real hardware. The guys at Business 2.0 are reporting that Sony is extremely confident in their new toy and a lot of game developers seem to share the sentiment.

Business 2.0 – Magazine Article – Will Sony’s PSP Become the iPod of Gaming Devices?

When it was unveiled in concept at last year’s E3 trade show, game publishers raced to get a piece of the action. Andrew House, executive vice president of Sony Computer Entertainment, reports that within 24 hours of the announcement, he was fielding dozens of queries from publishers eager for more information. “Everyone said, ‘We’re there on day one. Just tell us what to do,’” House recalls. So far, 89 companies have signed on. By comparison, when Nokia launched its N-Gage game-device-cum-cell-phone last year, it struggled to land five publishers. The N-Gage—no surprise—turned out to be a dog.

What made the early reaction to the PSP so extraordinary is that it was all based on a concept, a mere description—not on an actual device that people could hold and put through its paces. Now, as the industry gears up for this year’s E3, the buzz is all about the real live PSP, which will make its formal debut at the confab on May 11 and hit store shelves in the United States by next March.

So why are game publishers, who’ve been burned before by all those failed platforms, so jazzed about the PSP? Because it perfectly fills a gaping hole in the market: the need for a handheld gaming device that’s as hip as the iPod and that appeals to the over-18 crowd, now the majority of all gamers. Today Nintendo owns the $2 billion-a-year handheld market with its $99 Game Boy and sells 60 percent of them to kids under 18. Wedbush Morgan Securities predicts that so long as the PSP arrives at a reasonable price (rumored to be $199 to $299), it will spur 5 percent growth in the $10 billion videogame business in 2005. As for Sony, it could move 7 million PSPs in the U.S. market next year—twice the number of PS2s sold in the first year and three times the number of iPods sold to date.

The feeling seems to be that what will make the PSP a success will be what was a large part of the success of the original PS1; namely the introduction of games on an optical disc which are cheaper to produce and capable of holding much more data than cartridges. Sony was the first to sell a console that used CDs as the sole distribution method of games. It also helped that the PS1 included hardware specifically for 3D games, which was a good bit of foresight on Sony’s part, but the relatively huge and cheap data storage of CDs had a lot to do with it as well. As with the PS1 the PSP will use optical discs holding 1.8 Gigabytes as its media. The PSP isn’t going to be cheap, though, so it’ll be interesting to see how much that offsets the lure of a portable with near-PS2 quality graphics.

3 thoughts on “Business 2.0 thinks Sony’s PSP will be a big hit.

  1. I’m not too sure if this PSP will catch on…
    I think its too expensive. And mobile gaming just isn’t very cool.
    Mobile gaming can never really match up against the consoles or PC and is therefore a nice gadget, it’s a funny extra thing you can buy for in the train.
    If it is very expencive, like the PSP probably will be, I don’t expect the 18+ public to buy it.
    I’d mutch rather have a nice PC or PS2 than a PSP with some games that aren’t really that good.
    Also, there will be very big competition for the PSP form the mobile phone industry.
    Some very nice games will be coming out on the next generation of mobilephones.
    I don’t think it will catch on but I guess we will see…

  2. I can’t believe the guy thinks people over 18 would not buy the psp im way over 18 and im gonna snatch it up.. And the games arn’t that good????? Is he nuts .. o my fault cell phone games look a whole lot beter than some dumb 3d psp games ;^p yea rite====

  3. You’re going to BUY a PSP for the games?  If I somehow end up with one much to my misfortune, I’ll just shoot the UMD at people. XP
    Now if you excuse me, I’m going to play a non-card based game *cough*MGA*coughcough*

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